Updated: UCLH claims late win in Project Diamond funding battle

In March, University College London Hospitals Foundation Trust reported that it faced a potential deficit of £16.5m because it had been offered just £5m of “Project Diamond” funding, compared with the £20m it had received in 2013-14.

The money is intended to compensate teaching hospitals for the loss of training funds and also reflect the higher cost of the specialist work they do.

There has been a long running battle over how much Project Diamond money would be paid to trusts in 2014-15. NHS England, which has administered Project Diamond since the abolition of NHS London Strategic Health Authority, told the trusts last June that it would reduce the £62m fund by half for 2014-15 and remove it entirely in 2015-16.

But a UCLH spokeswoman on Monday told HSJ that the organisation had received its full share of money for 2014-15, leading to an improvement in its year end position. The trust’s May board papers report a surplus of £5.4m for 2014-15, and state that the figure was “better than previously anticipated” in part due “to the year-end settlement of Project Diamond funding in full”.

A spokeswoman for the Royal Brompton and Harefield Foundation Trust confirmed the specialist heart and lung organisation had received £13.1m in Project Diamond funding for 2014-15.

However, NHS England denied it had made any late additions to the sum provided to UCLH. An NHS England spokeswoman said: “NHS England has provided no additional funding to UCLH over and above their share of the initial £28.5m allocated last Autumn.”

She told HSJ that NHS England had paid out a further £22m of funding in late 2014-15, but none to trusts like UCLH that had rejected the “enhanced tariff offer” prices for 2015-16.

“A final tranche of year-end 2014-15 payments worth a further £22m was made by NHS England in line with the ETO tariff offer published in February only to those specialised providers who opted for the ETO and for those who had agreed their specialised investment totals for 2015-16,” she said. “This did not include UCLH. NHS England has not, and is not going to, make any extra payments for 2015-16.”

HSJ revealed in March that NHS England offered Project Diamond trusts access to the full £124m fund over two years on the condition they dropped their opposition to the enhanced tariff offer, which imposes a marginal rate of 70 per cent for increases in specialist activity.

Numerous senior sources at the trusts said that at the height of the row over the tariff, NHS England chief financial director Paul Baumann offered to maintain the specialist fund for 2014-15 and 2015-16, provided the trusts signed up to NHS England and Monitor’s revised tariff offer.

However, all but one of the 16 specialist organisations were among the 30 trusts that eventually rejected the new offer and opted to stay on 2014-15 prices.

This story was updated at 6pm on 12 May 2015, following reciept of a response from NHS England stating that it was not the source of the additional funding that UCLH reported receiving.